question archive In its first year of operations, 2020, Marigold Corp
In its first year of operations, 2020, Marigold Corp
Subject:AccountingPrice: Bought3
In its first year of operations, 2020, Marigold Corp. invoiced $185,000 in service revenue. Of that amount, $20,000 was still owing from customers at the end of year. In 2020, Marigold incurred various operating expenses totalling $91,000, of which $82,000 was paid in cash. Salaries and wages paid to employees totalled $75,000 and $2,400 was still owing at the end of the year. In addition, Marigold prepaid $5,500 for insurance coverage that covered the last half of 2020 and the first half of 2021. Marigold estimates it will owe $8,600 in income tax when it files its corporate income tax return after its 2020 year end. Calculate the net income for 2020 under the accrual basis of accounting. Net income $ Calculate the net income for 2020 under the cash basis of accounting. Net income $ Which basis of accounting (accrual or cash) gives the most useful information for decision-makers? The basis of accounting provides more useful information for decision makers.
